By John Trumbo, Tri-City Herald
Published Monday, Mar. 12, 2012
KENNEWICK -- Kennewick rode out the economy's difficult ride fairly well last year and this year should hold steady, finance and housing officials recently told the city council.
Banks will continue to be tight-fisted with their cheap money, while regulators increase scrutiny and credit unions enter the loan market, said Ben Rutledge with Gesa Credit Union.
Rutledge noted that a benefit of the recession was that it "weeded out bad commercial lenders," which gave the credit unions their opening to invest $90 million in the Tri-Cities in the past three years.
Most of the money was for real estate loans, with agricultural loans receiving the second largest share.
Rutlege said to expect minimal economic growth this year and flat interest rates through 2014, and tougher rules and regulations and a debt crisis that will affect Europe and the U.S.
In a word, Rutledge described the future as "uncertainty."
And Dave Retter, owner and broker of Windermere Real Estate in the Tri-Cities, agreed that Kennewick's housing market "isn't as rosy as 11 years ago."
But he said Kennewick has been a good market, with 42 percent of the people moving to the area choosing homes in Kennewick. Still, 73 percent of the houses sold in Kennewick in the past three years have been resales, he added.
The open spaces of the past that saw big residential developments such as Hansen Park almost are gone, so future development will have to look at the Southridge area and pockets of property for infill projects, he said.
"The challenge is how do we do infill and make it affordable?" Retter said. Reducing some requirements that gobble up land, such as curbs, gutters, sidewalks and mow strips, would help, he said.
"If there is no change, people are going to Pasco," Retter said.
"I don't think we're going to see any boom (this year). We'll just be consistent," he said.
Renee Dahlgren of the Home Builders Association of the Tri-Cities said Kennewick is "the sweet spot" of the Tri-Cities for being the most consistent with the kind of growth and home values desired and for having great stability in its market.
The number of single-family home permits has continued upward during the recession while the average single-family home value also increased, she said.
Kennewick's advantage in the Tri-Cities is its comparatively lower permit costs, and having a streamlined permitting process at city hall, Dahlgren said.
She also noted:
* Housing Predictor in September 2011 ranked Kennewick the second best housing market in the U.S.
* Farmers Insurance Group in December 2011 named the Tri-Cities the No. 1 most secure place to live in the U.S. among mid-sized communities.
* Milken Institute in December 2011 ranked Tri-Cities the 10th best-performing community in the country.
But being well positioned to handle growth and having the lowest interest rates in history with a 3 percent vacancy rate doesn't mean 2012 will be a growth year, she said.
National recovery and getting Hanford waste stabilized are unresolved big issues, Dahlgren said.
She also told Kennewick officials to expect a "flat" 2012 for housing.
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